LGC eyes less rancor with new chief

CONCORD - Maura Carroll resigned as head of the troubled Local Government Center on Friday after being asked to step down by the organization's board of directors, but whether the change will affect a lawsuit or lead to improved relations with state regulators is still in question.

Carroll's resignation was announced Friday by the LGC in a news release that also said George Bald, the former commissioner of the Department of Resources and Economic Development, would serve as interim executive director for six months.

Tom Enright, chairman of the LGC board of directors, said the board became frustrated by an inability to encourage direct communication with the state Bureau of Securities Regulation, or BSR, without going through lawyers.

"We have to do whatever we can to foster a relationship with our regulators," he said. "Maura was not able to accomplish that. George Bald comes with an enormous reputation for being able to talk to people at the highest levels of state government.

"You can't resolve complex business situations by going through trial attorneys," he said.

Neither Carroll nor Bald could be reached for comment.

The Local Government Center, based in Concord, provides communities, counties, quasi-government organizations and schools with health insurance, liability insurance, legal support and legislative advocacy. About 105,000 employees are provided health care by the organization's health care arm, LGC HealthTrust, according to its website.

Not every community is a member; Manchester and Nashua, for example, are self-insured.

Carroll assumed the director's role in 2009, and her tenure has seen tumult in the organization, as it was dogged by continued criticism by towns and, most notably, the Professional Fire Fighters of New Hampshire, for its practice of retaining surpluses from its self-funded risk pools for liability claims and health care coverage for municipalities and other government agencies such as school districts, housing authorities and water districts.

David Lang, president of the firefighters association, led a decade-long push to force LGC to publicly disclose how it was spending money collected from its risk pool. Lang, who could not be reached for comment, filed a series of right-to-know requests, which he said in November ultimately showed that the LGC was spending risk pool money intended for health care to subsidize workers' compensation claims and an expansion of the LGC building in Concord.

The organization claimed the reserves kept rates stable for members and reduced long-term costs, but critics have said the surplus should have been returned to its members rather that used for other purposes.

Fourteen New Hampshire communities have filed a right-to-know request with LGC seeking detailed financial information, including annual audits, evaluations of pooled risk management programs, bylaws, documents indicating the name of each LGC member entity and the date of departure for each member since 2003.

After a hearing about the surpluses, the New Hampshire State Department in August ordered the LGC to repay more than $50 million to its members. The LGC has appealed the order to the state Supreme Court.

"We've been entangled in these legal proceedings for a long, long time," Enright said. "This is not the way for a regulated entity and the regulator to get along.

"What is very clear is that we have to have a productive relationship with our regulator. It became clear that could not occur with Maura at the head of the organization," he said.

Enright said the board would consider dropping its appeal if BSR would agree to talk directly.

"The Supreme Court recommended mediation," he said. "We contacted (BSR) and said we would like to mediate. We were flatly turned down."

Not so, said Barry J. Glennon, the regulator in question at BSR.

"They were not flatly turned down," he said. "During the course of events prior and leading up to the hearing, the Local Government Center was offered multiple opportunities to settle the matter. They declined."

Glennon likened the LGC's request to resolve the issue now through mediation to a convict trying to negotiate a plea bargain after a jury has handed down its verdict.

He said BSR has no plans to begin negotiations when the verdict of the hearing was beneficial to cities and towns.

"When the LGC opted not to comply with the bureau's requests, we had no choice but to take administrative action," he said. "This is a regulatory matter for which a decision was made. To go back and renegotiate doesn't seem to be the proper course for a regulatory agency after receiving a favorable decision."

Despite the legal proceedings, Glennon said BSR has a responsibility to maintain communication with the parties it regulates, including LGC.

"(Carroll) certainly has committed her career to serving cities and towns, and we wish her well," he said. "And we look forward to working with acting Director Bald."

Todd Selig, town administrator of Durham, one of several communities battling the LGC over its surpluses, described Carroll as "a friend" who was a longtime advocate for localities before taking the helm at the LGC. Before becoming LGC director, Carroll spent most of her career as a lobbyist for the New Hampshire Municipal Association, which became part of the LGC in 2003. As a lobbyist, she was a "tireless advocate for towns and cities," he said.

"Maura was placed in an incredibly difficult position when she took the position of executive director at the LGC," he said. "This has been a hard few years for the organization and, I'm sure, a hard few years for Maura personally.

"That is not to say that I don't still have the highest regard for Maura Carroll," Selig said. "While a lot of controversy is swirling around the LGC at this time, Maura has been a shining light in the midst of it all."